Question 1

The purpose of a high-risk pool is to

Accepted Answer

A)  provide insurance for poor drivers.
B)  reduce medical costs associated with auto accidents.
C)  take unsafe drivers off the road.
D)  reduce auto insurance premiums with state regulation.
E)  offer premium discounts to safe drivers.

Question 2

Home insurance costs are affected most directly by

Accepted Answer

A)  the number of claims in an area.
B)  insurance agents' commission.
C)  government regulations that set premiums.
D)  processing costs of claims.
E)  the profits of the insurance company.

Question 3

Your home insurance provides for replacement value for personal property losses.A television is stolen.It cost $1,000 two years ago and has an expected life of 5 years.A comparable television costs $500 today.What amount will the insurance company pay?

Accepted Answer

A)  $100
B)  $150
C)  $200
D)  $350
E)  $500

Question 4

Not driving to work is an example of what risk management technique?

Accepted Answer

A)  Risk avoidance
B)  Risk reduction
C)  Risk assumption
D)  Risk education
E)  Self-insurance

Question 5

The purpose of a high-risk pool is to assist people with poor driving records in obtaining automobile insurance coverage.

Accepted Answer

A) True 
 B)False

Question 6

Peril is defined as

Accepted Answer

A)  the refusal by an insurance company to pay for the covered loss.
B)  the cause of risk.
C)  the cause of a possible loss.
D)  an uncertainty as to loss.
E)  risk

Question 7

Risk management is not an organized strategy for protecting and conserving assets and people.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following factors is used to determine a person's driver classification?

Accepted Answer

A)  Age
B)  Type and age of vehicle
C)  Claims in your geographic area
D)  Insurance company claim processing costs
E)  State insurance premium regulations

Question 9

The ____________ method to settle claims is based on the current replacement cost of a damaged or lost item less depreciation.

Accepted Answer

A)  replacement value
B)  actual cash value
C)  umbrella
D)  endorsement
E)  personal articles endorsement

Question 10

Risk of financial loss due to legal expenses, medical expenses, lost wages, and other expenses associated with injuries caused by an automobile accident for which you were responsible are covered by what type of auto insurance?

Accepted Answer

A)  Bodily injury
B)  Accident Benefits
C)  Uninsured motorist's protection
D)  Property damage
E)  Comprehensive physical damage

Question 11

Wind damage occurs to your car costing $3,000 to repair.If you have a $500 deductible for collision and full coverage for comprehensive, what portion of the claim will the insurance company pay?

Accepted Answer

A)  $500
B)  $1,300
C)  $2,500
D)  $3,000
E)  $3,500

Question 12

There are no significant differences in home owner rates when comparing different insurance companies

Accepted Answer

A) True 
 B)False

Question 13

Voluntary medical payments coverage in a home insurance policy is designed to pay for legal action taken against a homeowner who may be legally responsible for injury or property damage of others.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following insurance policy provisions requires that the insured must pay for part of the loss of a claim if the property is not insured for the specified percentage of replacement value?

Accepted Answer

A)  personal property floater
B)  an endorsement
C)  assigned risk clause
D)  umbrella coverage
E)  coinsurance clause

Question 15

Georgette Valentine has expensive photography equipment for use in her hobby.Which coverage from the following list would pay for damage or theft of this equipment?

Accepted Answer

A)  an umbrella policy
B)  a household inventory
C)  additional living expense coverage
D)  a personal articles endorsement
E)  a coinsurance floater

Question 16

Auto insurance premiums are not affected by?

Accepted Answer

A)  Make and style of car
B)  Use of Vehicle
C)  Color of vehicle
D)  Driver classification
E)  Provincial differences

Question 17

Your home insurance provides for replacement value for personal property losses.A microwave is stolen.It cost $300 two years ago and has an expected life of six years.A comparable microwave costs $200 today.What amount will the insurance company pay?

Accepted Answer

A)  $100
B)  $150
C)  $200
D)  $350
E)  $300

Question 18

Comprehensive coverage would cover financial losses due to

Accepted Answer

A)  injuries caused by a driver without insurance.
B)  damage to your car in an accident for which you were at fault.
C)  damage to your car caused by wind or hail.
D)  legal action against you for an accident.
E)  damage to a neighbor's tree with your car.

Question 19

Purchasing a technology stock that may or may not increase in price is an example of ___________ risk.

Accepted Answer

A)  speculative
B)  pure
C)  commercial
D)  personal
E)  liability

Question 20

Which of the following home insurance policies will have the highest premium?

Accepted Answer

A)  Standard
B)  Broad
C)  Comprehensive
D)  All forms will have the same cost.
E)  Broad and Comprehensive are equally expensive

Exam 8: Home and Automobile Insurance

There are no significant differences in home owner rates when comparing different insurance companies

Correct AnswerverifiedShow Answer

Your home insurance provides for replacement value for personal property losses.A microwave is stolen.It cost $300 two years ago and has an expected life of six years.A comparable microwave costs $200 today.What amount will the insurance company pay?

Correct AnswerverifiedShow Answer

The ____________ method to settle claims is based on the current replacement cost of a damaged or lost item less depreciation.

Correct AnswerverifiedShow Answer

Purchasing a technology stock that may or may not increase in price is an example of ___________ risk.

Correct AnswerverifiedShow Answer

Peril is defined as

Correct AnswerverifiedShow Answer

Your home insurance provides for replacement value for personal property losses.A television is stolen.It cost $1,000 two years ago and has an expected life of 5 years.A comparable television costs $500 today.What amount will the insurance company pay?

Correct AnswerverifiedShow Answer

Which of the following insurance policy provisions requires that the insured must pay for part of the loss of a claim if the property is not insured for the specified percentage of replacement value?

Correct AnswerverifiedShow Answer

Georgette Valentine has expensive photography equipment for use in her hobby.Which coverage from the following list would pay for damage or theft of this equipment?

Correct AnswerverifiedShow Answer

Home insurance costs are affected most directly by

Correct AnswerverifiedShow Answer

Which of the following factors is used to determine a person's driver classification?

Correct AnswerverifiedShow Answer

The purpose of a high-risk pool is to assist people with poor driving records in obtaining automobile insurance coverage.

Correct AnswerverifiedShow Answer

Not driving to work is an example of what risk management technique?

Correct AnswerverifiedShow Answer

Risk management is not an organized strategy for protecting and conserving assets and people.

Correct AnswerverifiedShow Answer

Risk of financial loss due to legal expenses, medical expenses, lost wages, and other expenses associated with injuries caused by an automobile accident for which you were responsible are covered by what type of auto insurance?

Correct AnswerverifiedShow Answer

The purpose of a high-risk pool is to

Correct AnswerverifiedShow Answer

Which of the following home insurance policies will have the highest premium?

Correct AnswerverifiedShow Answer

Comprehensive coverage would cover financial losses due to

Correct AnswerverifiedShow Answer

Auto insurance premiums are not affected by?

Correct AnswerverifiedShow Answer

Wind damage occurs to your car costing $3,000 to repair.If you have a $500 deductible for collision and full coverage for comprehensive, what portion of the claim will the insurance company pay?

Correct AnswerverifiedShow Answer

Voluntary medical payments coverage in a home insurance policy is designed to pay for legal action taken against a homeowner who may be legally responsible for injury or property damage of others.

Correct AnswerverifiedShow Answer

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